VALUATION PROVIDED FOR ENDESA AND ENEL ASSETS TO BE SOLD TO E.ON

Published on jueves, 27 marzo 2008

Completion of the transaction – subject to acceptance by E.On – should enable Enel to reduce its net consolidated financial debt by about 8.4 billion euros, taking into account the deconsolidation of the debt of the assets to be sold. Fulvio Conti: “This transaction, fruit of the pax electrica signed between Enel, Acciona and E.On one year ago, will reinforce competition and integration in the European energy market”.

Rome, 27 March 2008 - The valuation of the Endesa Group assets to be sold to E.On AG (E.On), as determined by the advisers to Enel SpA (Enel), Acciona SA (Acciona) and E.On, was disclosed today, in accordance with the agreement signed by the parties on 2 April 2007.

The valuation of the Enel Group assets to be sold to E.On, as determined by the advisers to Enel and E.On, was also disclosed today, in accordance with the above-mentioned agreement.

The total value of the assets to be sold to E.On, including minority stakes and net financial debt, is 13,525 million euros, as determined by the advisers. Based on the above-mentioned agreement of 2 April 2007, E.On has 10 working days from today (excluding Saturdays, Sundays and bank holidays in Madrid) to communicate if it intends to proceed with the purchase of these assets or not. Enel estimates that its net consolidated financial debt at 31 December 2007 of about 55.8 billion euros (excluding the debt related to the assets held for sale, equal to 1.6 billion euros), would be reduced to about 49 billion euro following completion of the transaction.

The above valuations do not include the disposal of drawing rights for electricity of nuclear origin (for 450 MW for 10 years), foreseen by the agreement of 2 April 2007, as the process for their valuation has been extended and is still underway.

Fulvio Conti, Chief Executive Officer of Enel, remarked: “Completion of this transaction, fruit of the pax electrica signed between Enel, Acciona and E.On one year ago, will reinforce competition and integration in the European energy market. The transaction will also cut Enel’s debt bringing it to levels in line with an ‘A’ credit rating by Moody’s and Standard & Poor’s and is consistent with our business plan for 2008-2012, which foresees reaching a net consolidated financial debt of between 45 and 49 billion euros in 2012”.


Endesa Group Assets

On 18 March 2008, Enel, Acciona and E.On reached an agreement to partially modify the specific assets of the Endesa Group to be sold to E.On. In particular, based on the modifications to the agreement signed on 2 April 2007, the Spanish thermoelectric plants belonging to the Endesa Group in Foix (an oil-fired plant with an installed capacity of 520 MW and including a project under development for an 800 MW combined-cycle plant) and Besos 3 (a combined-cycle plant with an installed capacity of 388 MW) will be substituted by the thermoelectric plant in Tarragona (a combined-cycle plant with an installed capacity of 395 MW).

The following valuations were provided by the advisers:

  • The enterprise value of Endesa’s entire stake in Endesa Europe SA (Endesa Europe), net of assets and trading activities outside of Italy, France, Poland and Turkey and considering the 100% stakes in Endesa Italia SpA (Endesa Italia) and Endesa France SA (Endesa France) is 10,750 million euros;
  • The consideration of the Spanish thermoelectric plants at Los Barrios (a coal-fired plant with an installed capacity of 567.5 MW) and Tarragona is 750 million euros.

Based on these valuations, adjusted to account for shareholdings by minority investors in Endesa Italia and Endesa France, as well as the financial debt of Endesa Europe foreseen at the date of the conclusion of the sale of the assets to E.On, Endesa estimates that it will receive a consideration of 7,563 million euros, subject to adjustments based on the actual financial debt of Endesa Europe on the date of the closing of the sale to E.On.

As far as Endesa Italia is concerned, a decision is expected soon from A2A, currently the minority shareholder in such company with a 20% stake, regarding the possible disposal of that stake and the simultaneous purchase of assets of Endesa Italia with an installed capacity up to 1.75 GW.

The transaction is furthermore subject to approval by the Shareholders’ Meeting of Endesa as well as the necessary administrative authorisations.


Enel Group Assets

The Enel Group assets to be sold to E.On include all Enel’s direct and indirect holdings in Enel Viesgo Generacion SL, Enel Viesgo Servicios SL and Electra de Viesgo Distribucion SL as well as in the holdings of these companies, with the exception of a 50% stake in Enel Union Fenosa Renovables SA, which has since been transferred to Enel Investment Holding BV.

Based on the estimates provided by the advisers, the Enel Group assets to be sold to E.On have an enterprise value of 2,025 million euros.

Based on these valuations, adjusted to account for the net financial debt of the companies to be sold foreseen at the date of the conclusion of the sale of the assets to E.On, Enel estimates that it will receive a consideration of about 800 million euros, subject to adjustments based on the actual financial debt of the companies concerned on the date of the closing of the sale to E.On.

Price Sensitive | marzo, 27 2008

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